Interoperability: The Wrong Prescription for Platform Competition

In this paper we assess the potential effects of recent proposals to mandate interoperability as a competition remedy for digital platforms. We find that mandating interoperability for digital platforms may harm competition and innovation. Interoperability standards for digital platforms may reduce differentiation and result in fewer functionality options for users. Interoperability may also weaken platforms’ incentives to compete through innovation and pricing. Interoperability may discourage